You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 2Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 18Q. Instructions: Enter your response rounded to the nearest two decimal places. a. What is the socially efficient level of output?
You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 2Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 18Q. Instructions: Enter your response rounded to the nearest two decimal places. a. What is the socially efficient level of output?
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 11SQ
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Question
You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 2Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 18Q.
Instructions: Enter your response rounded to the nearest two decimal places.
a. What is the socially efficient level of output?
units
b. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output.
Instructions: For correct answers place a check mark.
check all that apply
- Nonrival consumptionunanswered
- Pollution taxesunanswered
- Pollution permitsunanswered
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